EghtesadOnline: Iran and India are expected to sign a deal on developing Farzad-B Gas Field in the Persian Gulf by the end of next month after years of negotiations.

Ali Akbar Shabanpour, managing director of Pars Oil and Gas Company, made the statement after discussing the most sought-after gas project with a top delegation of ONGC Videsh Ltd—the overseas arm of India's state-owned Oil and Natural Gas Corporation—in a meeting in Tehran this week, Shana reported.

"POGC and the Indian side have reached an understanding on technical and economic grounds over developing Farzad-B Gas Field. The two sides have agreed to continue the talks to sign an agreement by the end of September," he added.

An initial development plan calls for extracting 30 million cubic meters of natural gas per day from the field, but according to Shabanpour, ONGC Videsh has stipulated in its proposal that it will draw 56 million cubic meters of gas per day from the field, reports Financial Tribune.

"The two sides hold close views in terms of investment and financial issues, and made huge progress in negotiations," he said. A consortium of three Indian companies, namely ONGC, Oil India and the Indian Oil Corporation, discovered huge amounts of gas reserves in Iran's Farsi Block in 2008. The discovery in the Persian Gulf was later named Farzad-B.

However, Indians did not obtain the permission to develop the field after they were forced to abandon the project following the enforcement of tighter western financial and trade restrictions over Iran's nuclear dispute.

Gas output from the field can either be converted into liquefied natural gas by freezing at subzero temperature and shipping in cryogenic ships to India or transported through a pipeline passing either overland through Pakistan or subsea. Farzad-B is estimated to hold more than 500 billion cubic meters of in-place gas reserves, of which 370 billion cubic meters are recoverable.

Tortuous Talks

India has been pushing for the development rights of Farzad-B after Iran and the six world powers (the five permanent members of the United Nations Security Council plus Germany) reached an accord in July last year on temporarily limiting Tehran's nuclear program in exchange for some sanctions relief.

As a gesture of goodwill, Iran has excluded Farzad-B from a list of several dozen oil and gas projects that it plans to put out to tender under a new model of contracts, dubbed Iran Petroleum Contracts. In September, ONGC Videsh reportedly submitted a $10-billion proposal for developing the Farzad-B Gas Field and shipping the gas to India.

An official at the Iranian Offshore Oil Company also said in December that an initial agreement had been reached on developing the first phase of Farzad-B project under a $3-billion contract.